Many tissue-specific stem cells maintain the ability to produce multiple cell types during long periods of non-division, or quiescence. FOXO transcription factors promote quiescence and stem cell maintenance, but the mechanisms by which FOXO proteins promote multipotency during quiescence are still emerging. The single FOXO ortholog in C. elegans, daf-16, promotes entry into a quiescent and stress-resistant larval stage called dauer in response to adverse environmental cues. During dauer, stem and progenitor cells maintain or re-establish multipotency to allow normal development to resume after dauer. We find that during dauer, daf-16/FOXO prevents epidermal stem cells (seam cells) from prematurely adopting differentiated, adult characteristics. In particular, dauer larvae that lack daf-16 misexpress collagens that are normally adult-enriched. Using col-19p::gfp as an adult cell fate marker, we find that all major daf-16 isoforms contribute to opposing col-19p::gfp expression during dauer. By contrast, daf-16(0) larvae that undergo non-dauer development do not misexpress col-19p::gfp. Adult cell fate and the timing of col-19p::gfp expression are regulated by the heterochronic gene network, including lin-41 and lin-29. lin-41 encodes an RNA-binding protein orthologous to LIN41/TRIM71 in mammals, and lin-29 encodes a conserved zinc finger transcription factor. In non-dauer development, lin-41 opposes adult cell fate by inhibiting the translation of lin-29, which directly activates col-19 transcription and promotes adult cell fate. We find that during dauer, lin-41 blocks col-19p::gfp expression, but surprisingly, lin-29 is not required in this context. Additionally, daf-16 promotes the expression of lin-41 in dauer larvae. The col-19p::gfp misexpression phenotype observed in dauer larvae with reduced daf-16 requires the downregulation of lin-41, but does not require lin-29. Taken together, this work demonstrates a novel role for daf-16/FOXO as a heterochronic gene that promotes expression of lin-41/TRIM71 to contribute to multipotent cell fate in a quiescent stem cell model.